Transcript Climate Change Financing: Selected Issues

Climate Change Financing:
Selected Issues
Track 6 Contribution
Climate Change Impacts
• The world is already 0.8° degrees warmer
than 1950.
• 4.0° degree warming by 2100 without
significant policy change
– “Existential threat” to atoll countries
– Sea level rises of 0.5 – 1 meter
– Extinction of coral reefs, ocean
acidification
• Warming of 1.5 ° degree by 2100 will be
irreversible in 7-10 years on current
emission trends.
Source: Turn Down the Heat, World Bank 2012
Pacific Infrastructure Needs
• Built infrastructure assets in the Pacific
islands about US$ 40 billion
• US$ 650 million per year needed just to
maintain current assets (3% GDP)
• Millions of people still without access to
mobile phones, electricity grid, transport
network
• Private sector (over US$ 1 billion already
invested in telecoms, scope for US$2
billion in renewable energy)
• But public investment critical
Additional Adaptation Costs
•
Costs for developing countries world wide to adapt to
climate change: US$70 - $100 billion every year
•
If a 4° warmer world by 2100, the Pacific will need
– US$ 18 – 31 billion between 2010 and 2050
– US$ 450 - 775 million every year
•
If warming kept to 1.5°, the Pacific will need
– US$ 6.0 billion (US$ 150 million per year) between
2010 and 2050
•
Estimates are minimums:
– US$ 70m just to ensure current water and
sewerage system in Suva resilient to climate change
(new water intake to avoid salt water intrusion,
relining of pipes less than 1 meter above sea level)
Source: The Economics of Climate Change in the Pacific,
Asian Development Bank 2013
Disasters already cost the Pacific US$300m
on average – every year
Average annual losses as a % of GDP
10
9
8
7
6
5
4
3
2
1
0
• 10 of the 25 most vulnerable countries are in the Pacific
• Cyclone Pam: damage and losses of $450m in a single event
equal to 65% of Vanuatu’s GDP
• Intensity of cyclones likely to increase with climate change
• Almost 60% of total infrastructure assets in the Pacific
within 500 meters of the coast
Adaptation Financing
• $3 billion annual development assistance
to the Pacific incorporating climate
change resilience
• Limited “new and additional” funding
– Pacific received about US$200 million in
past 5 years
– Climate Investment Funds, Global
Environment Facility
– Complex to access
• Insurance:
– Limited coverage for households
– New Pacific insurance scheme (PCRAFI)
provides coverage for Governments, but
only for immediate needs (TC Pam payout
$2m to Vanuatu)
Green Climate Fund
• Great opportunity
• US$10 billion pledged, and US$ 6 billion paid
• 50% for adaptation (compared to about 15% of
current climate funds)
• At least 50% of adaptation funds for vulnerable
countries
– $2.5 billion for LLDCs and SIDS
• First funding round: November 2015
– Proposals being prepared for Kiribati, Fiji, Samoa
(among others)
• 20 accredited entities so far:
– ADB, SPREP, UN, World Bank in Pacific
– Scope for national accreditation
• Key Question: Terms
– Decisions to be made on a case by case basis
Suva Declaration:
2 Financing Recommendations
• Developed countries should honour 2010 Copenhagen
agreement to mobilize US $100 billion in adaptation
funding
– Still an adaptation financing gap of over $70 billion per year about equal to global aid flows (World Bank)
– Meeting $10 billion GCF pledges a good start…but only a start
• New and additional adaptation funds for SIDS should be
100% grants
– SIDS are at the forefront of adaptation, but insignificant
contributors to climate change
– Loans, even if concessional, will require SIDS to increase debt or
divert resources from other priorities